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Sixth auction of T-bonds 4.5 times oversubscribed

The auction, which is part of the Dh9 billion T-Bond issuance programme for 2022, received strong demand through the six primary bank dealers

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The sixth auction of the UAE's dirham-denominated treasury bonds was oversubscribed by 4.5 times and received bids worth Dh6.72 billion, the UAE Ministry of Finance said on Monday.

The auction, which is part of the Dh9 billion T-Bond issuance programme for 2022, received strong demand through the six primary bank dealers.

The strong demand was across both tranches with a final allocation of Dh750 million for the 3-year tranche and Dh 750 million for the 5-year tranche, with a total of Dh1.5 billion issued in the auction.

The bonds, issued in in collaboration with the Central Bank of the UAE, had a spread of a 18 basis points (bps) over US Treasuries for three-year bonds, and a spread of 30 bps over US Treasuries for the five-year tranche.

The sixth auction followed the practice of re-opening the T-Bonds, which helps in building up the size of individual bond issues over time and improve liquidity in the secondary market.

The T-Bonds program will contribute in building the UAE dirham-denominated yield curve, strengthening the local debt capital market, developing the investment environment, providing safe investment alternatives for investors, as well as supporting sustainable economic growth, the Ministry of Finance said.

— issacjohn@khaleejtimes.com

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